The Hindu Business Line : TVS Motor gearing up to take on Japanese biggies

Brownie points
PT TVS Motors will have 100 dealers by next March
Confident of meeting the target of 1 lakh motorcycles by March
The company designed its motorcycles with fuel-saving features

THE TVS NEO, which is set for Indonesian launch

Jakarta May 15 It is a new name in Indonesia and, appropriately, its product is named `Neo'. With this novelty factor and a grit to make a success of its maiden overseas venture, TVS Motor Company hopes to worm its way into the five million-units-a-year two-wheeler market, 95 per cent of which is in the hands of the Japanese Big Three — Honda, Yamaha and Suzuki.

TVS Motor is prepared to back its $45-million investment in Indonesia with another $55 million in the next three years, so as to increase local production from 40 per cent now and thereby bring down costs. Today, the plant is built to a capacity of 3 lakh units a year, but TVS intends to add facilities like engine manufacturing here.

Eventually, says Mr B.L.P. Simha, President Director, PT TVS Motor Company, Indonesia, the facility at Karawang, an hour's drive from the capital Jakarta, will become TVS' hub for the ASEAN region.

The hard work of the last three years has seen a modern paint shop-cum-assembly plant come up at Karawang. The product, TVS Neo, a duck-shaped 110 cc Bebek step-through, is ready for the market. Is the market ready for Neo, is the question.

Neo feature

Mr K. Vijaya Kumar, Director-Sales and Marketing, believes it is. The product has been designed to have a few `firsts' in Indonesia and a few scoring points over the Big Three. For example, a dual clutch system has been introduced so that the bike can be both automatically or manually geared. There is a provision to warm the engine in the cold mornings with a temperature sensor to indicate when to use the choke. Space has been provided under the seat to keep the helmet.

Now the task before Mr Kumar is to market the product. "We are new here, nobody knows us. Therefore, our first step is to secure the trust and confidence of customers," he says.

Dealerships

PT TVS Motors will have 100 dealers by next March. These distributors will have inventories of spare parts and facilities for servicing vehicles— key elements in securing trust and confidence.

TVS Neo will be officially launched next month and Mr Kumar is confident of meeting the target of 1 lakh motorcycles by March. His own personal milestone is ramp up monthly sales to 10,000 by October. Pricing is to be decided in the next few days, but the competition sells comparable vehicles between Rs 50,000 and Rs 75,000.

TVS Motor Company is, therefore, standing at the head of the ASEAN runway. The production facility is ready, the product— in three variants— is ready, the marketing set up is will soon be, the back-up financial support is secured. All the rest is in the hands of Indonesians.

According to Mr P. Venkatesan, Head-Facilities, it has been easy working with Indonesians. Mr Venkatesan, who learnt to speak Bhasha Indonesian in three months, says the locals are eager workers. Till recently, the common Indonesian knew nothing of India. But now, having heard of India's success in software, they are very respectful of Indians, says Mr Kumar.

Backing up the hope that the goodwill will translate into sales is the fact that the Indonesian economy is doing extremely well. While the GDP growth was 6 per cent last year, the manufacturing sector grew by twice the number. The growing urban middle class segment will need motorcycles. Even today, motorcycle penetration is better than India's— 5 million units a year for a population of 230 million, compared to 8 million bikes for India's 1.2 billion people.

Focus on fuel saving

Last year, the Government removed subsidy on petroleum products causing a 50 per cent hike in prices of petrol and diesel. Indonesians were never really mileage-conscious, but they are beginning to be.

PT TVS Motor designed its motorcycles with fuel-saving features (engine warmer and dual mode ignition timing), which Mr Simha expects earn the company some brownie points over the competition. The next step is to bring in other TVS products such as Apache to Indonesia, he says.

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